Direct Answer
28 SEC filers are classified under the Standard Industrial Classification code that describes the systems integration industry, and their latest annual reports show $67.6 billion of combined revenue and a median operating margin of -15.5%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Systems integration firms combine hardware, software and networks into working solutions for clients and manage the projects, charging for time, materials or outcomes. Results follow project demand, utilization and fixed-price execution. The first numbers to compare across companies here are backlog and bookings, gross margin and utilization.
Key Industry Metrics
- Backlog and bookings: Contracted work waiting to be delivered and new orders signed. Backlog shows visibility, though project timing and scope changes affect when revenue is recognized.
- Gross margin: Revenue left after labor, hardware and subcontractors. Resale of equipment earns little, so mix toward services and software lifts margin.
- Utilization: The share of technical staff time billed to clients. Higher use lifts profit but leaves little slack, so project delays that idle staff quickly cut margin.
- Fixed-price risk: The exposure to contracts priced as a set amount rather than time and materials. Overruns fall on the integrator, so a high share raises the chance of losses on complex projects.
- Client concentration: The share of revenue from a few clients, often public bodies. A large contract ending or being delayed can move results, so a high share adds risk.
Primary Macro Drivers
- Technology project spending: Clients' budgets for new systems and upgrades set project volume, driving backlog and bookings.
- Public sector contracts: Government programs for modernization and defense are large and long, adding backlog less tied to commercial cycles.
- Cloud and security programs: Companies adding cloud and security programs need integrators to combine components, supporting bookings and utilization.
- Talent availability: Skilled staff set how much can be delivered, so supply affects utilization and margin.
Major Risks
- Fixed-price overruns: Projects priced in advance can cost more than planned, so overruns reduce gross margin directly; watch gross margin, project reserves and contract charges.
- Talent costs: Scarce engineers raise pay and slow staffing, squeezing margin on existing contracts; watch utilization, attrition and gross margin.
- Project timing: Delays and scope changes push revenue between quarters and tie up staff; watch backlog conversion and bookings against revenue.
- Competition: Rivals and client procurement push for lower rates, pressuring margin and win rates; watch bookings, gross margin and client concentration.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Cyclical |
| Capital Intensity | Low |
| Regulatory Intensity | Low |
| Industry Maturity | Mature |
| Geographic Importance | U.S. / Global |
Systems Integration Filers in the SEC Record
28 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification code 7373. Their latest fiscal years end between 2023 and 2026, and together they reported $67.6 billion of revenue. Median revenue growth over the prior year was 7.2%. Median operating margin was -15.5% and median net margin -9.9%. Median total liabilities were 56% of total assets, and 10 of 28 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Leidos Holdings, Inc. | $17.2 billion | 3.1% | 12.3% | 8.4% | FY 2026 |
| Kyndryl Holdings, Inc. | $15.1 billion | 0.2% | n/a | 1.2% | FY 2026 |
| Caci International Inc | $8.6 billion | 12.6% | 8.9% | 5.8% | FY 2025 |
| Science Applications International Corp | $7.3 billion | -2.9% | 7.2% | 4.9% | FY 2026 |
| Parsons Corp | $6.4 billion | -5.7% | 6.6% | 3.8% | FY 2025 |
| Godaddy Inc. | $5.0 billion | 8.3% | 22.8% | 17.7% | FY 2025 |
| Jack Henry & Associates Inc | $2.4 billion | 7.2% | 23.9% | 19.2% | FY 2025 |
| Unisys Corp | $2.0 billion | -2.9% | 4.0% | -17.4% | FY 2025 |
The 8 largest of 28 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Systems Integration guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
More in Information Technology
- Information Technology sector overview
- Taiwanese Semiconductor Foundries
- Software-as-a-Service
- Technology Hardware & Equipment
- Software & Services
- Technology Hardware, Storage & Peripherals
- Silicon Wafers
- Telecom Equipment
- Sensors
Put it to work
Frequently Asked Questions
What are the main KPIs for the Systems Integration industry?
Key performance indicators for the Systems Integration industry include: Backlog and bookings, Gross margin, Utilization, Fixed-price risk, Client concentration. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Systems Integration industry?
The Systems Integration industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing.
What are the biggest risks in the Systems Integration industry?
The primary risks for Systems Integration companies include: Fixed-price overruns, Talent costs, Project timing, Competition. Investors should assess each company's exposure to these factors and its track record of navigating them.